German utility E.ON AG said Thursday it finalized its agreement with Statkraft which sees the company take full ownership of E.ON Sverige, thereby strengthening its position in the Nordic market.
As part of the deal, E.ON will acquire Statkraft's 44.6% shareholding in E.ON Sverige and a hydropower plant in Sweden, valued at a total purchase price of approximately EUR4.5 billion. In return, Statkraft acquires E.ON AG shares to the value of approximately EUR2.18 billion, in Sweden - hydropower and five heat assets, in Germany - two gas power plants, 11 hydropower plants, shares in two biomass power stations, a structured gas contract and electricity supply contract, and in the U.K. - one hydropower plant.
E.ON CEO Wulf Bernotat said: "With this agreement, we will gain a strong platform for growth and investment in the Nordic region, and are gaining full freedom of strategic and entrepreneurial action. In line with our ambitious European strategy, we are set to invest around EUR6 billion in the Nordic market in the period 2006 through to 2013, strengthening energy security and our position in the region. In addition, we will now fully integrate our trading and renewables activities into our new centrally managed European businesses, taking advantage of synergies and bringing together world-wide expertise. Thursday, we also extend a warm welcome to Statkraft who will become an important shareholder."
"This agreement is also good news for customers in the region. The deal will create two strong and experienced competitors in the Nordic market, with E.ON remaining number two in Sweden and Statkraft growing to fourth position. This move is fully in line with an open and liberalized market. Through its investments, E.ON is committed to playing a leading role in building a secure, sustainable and affordable energy supply for our one million customers in the region."
E.ON's multi-billion investment in the Nordic region will focus on new energy production projects, including approximately EUR1.9 billion on power grids and metering, approximately EUR530 million on hydro power and approximately EUR580 million on wind power projects - including the construction of the Rodsand II offshore wind farm, off the coast of Denmark.
E.ON recently won the bidding process to build the second phase of the scheme that will be 207 MW when completed and will be one of the world's largest offshore wind farms; and the largest in the Nordic region.
E.ON and Statkraft are expected to complete the transfer of ownership of the assets by the end of the year, subject to the necessary approvals of the antitrust authorities. By becoming the sole owner of E.ON Sverige, E.ON will use its strengthened position to further expand its business in the market, with a focus on organic growth, increasing its renewables activities and delivering its ambitious investment plan for the Nordic region and across Europe.
E.ON is the energy company with the broadest presence in Europe, Thursday operating in almost 30 European countries. From 2007-2010, E.ON will invest around EUR63 billion in growth opportunities and building a portfolio of balanced power generation, including investing EUR6 billion into the expansion of its renewable business worldwide. E.ON is committed to building a secure, affordable and climate-friendly energy supply and reducing its specific CO2 emissions by 2030 by at least 50% compared with 1990 levels.